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26 November 2019

SoftBank launches $3 billion tender offer for WeWork shares

If the tender offer is completed to capacity, it will give SoftBank Group almost 80 per cent of WeWork, which is now valued at about $8 billion.

Bloomberg/Kiyoshi Ota

SoftBank Group launched a long-awaited $3 billion tender offer for WeWork stock and the offer expires on 1 April 2020, reported Bloomberg.

WeWork parent We Co. agreed to the tender offer from the Japanese conglomerate last month, one element of a $9.5 billion rescue package for the ailing office-sharing company. As part of SoftBank’s proposal to buy existing shares, WeWork co-founder Adam Neumann is entitled to sell as much as $970 million worth of his stock.

The bailout package—which also included millions of dollars in other payouts for Neumann as he exited the company—came as WeWork teetered on the brink of insolvency. The favourable terms for Neumann angered some employees, many of whom are facing job cuts as the company turns its focus to profitability. Last week, WeWork said layoffs would affect 2400 employees around the world or almost 20 per cent of its workforce.

Executives at SoftBank had been discussing a way to alter or shrink its offer, though it was unclear how they would renege on the agreement, Bloomberg reported last week. The tender offer launch is about three weeks behind its targeted kick-off, which was five business days after an accelerated $1.5 billion equity injection on 30 October 2019.

Besides the new equity injection and the tender offer, SoftBank’s rescue package also includes about $5 billion in new debt financing.


RELATED STORIES: SoftBank Group WeWork We Co.





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